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Tuesday, December 5, 2017

Shaw and Raynor vs. the Metropolitan Government of Nashville and Davidson County

The Beacon Center, December 5, 2017 -Who would have thought it would
be illegal to make music in Nashville? Unfortunately, the city’s ban on
home-based businesses means local musicians, hairstylists and other
aspiring entrepreneurs face steep fines and potential imprisonment if
any customers physically come to their homes to do business. Nashville
residents Lij Shaw and Pat Raynor have both lived this nightmare.

Lij operates a successful recording
studio in his home, while Pat undertook an expensive renovation to her
home to open up a hair salon that met all of Tennessee’s health and
safety standards. Both Lij and Pat ran their businesses for some time
without any trouble. Then one day, the city government threatened to
fine and take them to court unless they shut down their home-based
businesses.This ban has done real damage to
their ability to earn an honest living. Lij has lost significant revenue
since being ordered by a city officer to stop publishing his address in
advertisements for his business. Meanwhile, Pat has been forced to rent
a costly and inconvenient commercial studio just to keep her
hairstyling practice in business.

Home-based businesses have been a
common and legitimate use of property for entrepreneurship for
centuries. They cost less to get off the ground, they promote healthy
work-life balance, and they create jobs that otherwise might not exist.
Anyone who has taken a piano lesson in their teacher’s home or sent
their child to daycare in a neighbor’s home has been a client in a
home-based business.Even Nashville’s government knows it
would be outrageous (and impossible) to find and destroy every
home-based business in the city, so it enforces its client prohibition
with an unwritten don’t-ask-don’t-tell policy. Rather than reform this
unfair law, the city solicits anonymous complaints on its website, turning neighbor against neighbor and shutting down home-based businesses without any evidence of harm to anyone.

Most Nashville home-based business
owners never get in trouble for violating the client prohibition. Many
aren’t even aware of it. But the ban can be as disastrous as a lightning
strike for the unlucky few who get caught. Those local entrepreneurs,
like Pat and Lij, find their very livelihoods threatened.

This arbitrary law has nothing to do
with regulating traffic or noise in residential neighborhoods. The city
zoning code allows home-based daycares and short-term rentals to serve
up to 12 clients a day on the property. People who live in historic
homes are also allowed to use their homes for special events such as
wedding receptions and catering dinners up to several times a week.

Lij’s and Pat’s outlawed home-based
businesses are as neighborhood-friendly as the businesses Nashville
already permits. There’s no good reason for Nashville to shut them down,
so Lij and Pat are fighting back. They’ve teamed up with the Institute
for Justice and the Beacon Center of Tennessee to vindicate their
constitutional right to use their home to earn an honest living.

Home-Based Businesses: Finding the American Dream at HomeHome-based businesses offer people an
accessible path to entrepreneurship. There are many reasons people
aspire to start a business. Perhaps they want to be the next Mary Kay or
Steve Jobs, who famously launched the multi-billion dollar company that
is now Apple from his garage.
Perhaps they are tired of the 9-to-5 and want to be their own boss. Or
perhaps they want to fill a need in their community and earn an honest
living doing it. Whether their dreams are modest or ambitious, starting a
business out of their homes can make it more cost-effective for
would-be entrepreneurs to succeed.Opening a brick-and-mortar business
can cost thousands of dollars more, depending on industry and location.
In Nashville, for example, rents for office and retail space are at an
all-time high—around $23 per square foot for office space and $25 per
square foot for retail space—making it difficult for small and
independent businesses to thrive.
And that’s on top of other costs necessary to open a business,
including acquiring all of the necessary permits, insuring the business
and hiring employees. These high startup costs can prevent people with
great business ideas from ever pursuing them. That’s bad for everybody.

Home-based businesses, however, allow
an entrepreneur to figure out what works and what doesn’t before taking
on the expense of commercial space. One study found that most needed
less than $25,000 to get going—a sum many business owners can pull
together from personal savings or loans from family and friends.
Particularly in lean economic times, the low cost of starting a
home-based business can significantly reduce the risks inherent to
starting a business.

Additionally, some small businesses
just make more sense in the context of the home, particularly those
operated by only one person. An overwhelming 60 percent of home-based
businesses are run by people who work by themselves.
For an individual who just wants to personally offer tutoring, tax
preparation or music lessons, it likely will never make sense—or be
financially viable—to obtain commercial space.

Nashville’s Home Occupation LawNashville, Tennessee is a booming
city with a diverse economy. World-renowned for its thriving music
scene, the city bills itself as “Music City, U.S.A.,” but many of its roughly 685,000 residents also find work in the healthcare, publishing, banking, and transportation industries. Many others—the focus of this lawsuit—work from home.

Unfortunately, many of them are
illegal. A provision contained in Nashville’s residential zoning
ordinance prohibits any so-called “home occupations” from serving
clients on the property. This
home-business client prohibition was added to the city’s zoning code in
1998 without public debate or any record of why the law exists.

The Nashville government evidently
has some misgivings about this prohibition because it maintains a
don’t-ask-don’t-tell enforcement policy toward enforcement. The local
Department of Codes and Building Safety, known as “Codes,” investigates
home-based businesses only when somebody complains.

“It’s not something you could drive by and notice,” explained Codes Assistant Director Bill Penn to a columnist for The Tennesseean in 2015. “It’s something neighbors would have to turn in.”Nashville also doesn’t seem to want its home-business ban to apply as broadly as it does because Nashville allows
at least three kinds of home-based businesses that serve clients: day
care homes, owner-occupied short term rentals, and historic home events.
Those businesses are allowed to serve 12 clients per day in most cases.

Amazingly, the home-business law’s
defenders even boast about how well Nashville’s illicit home-based
businesses fare under this enforcement scheme. “I’ve got tons of small
businesses in my neighborhood, and nobody’s complaining about them,”
said Nashville Councilman Carter Todd, explaining his ‘no’ vote on a 2011 bill
that would have legalized home-based businesses. “I’ve got—down the
street, there’s a tutor. Farther down the street, there’s a woman that
teaches swim lessons. All these things technically may be against the
law, but they don’t bother anybody, nobody complains about it, and [the
don’t-ask-don’t-tell policy] works.”

But that’s simply wrong. Neither Pat
Raynor’s nor Lij Shaw’s home-based business could be seen or heard from
the street, but Codes ordered them to shut down anyway, accusing them of
no violation other than simply having a business.

In December 2016, Lij and Pat applied
to the city to rezone their homes to allow Lij’s home recording studio
and Pat’s hair salon to serve a limited number of clients.

Their neighbors turned out
overwhelmingly in support, presenting the Nashville Metro Council with
petitions bearing the signatures of 39 and44 of their neighbors, respectively.But
it was not enough for the government. Several months and public
hearings later, their applications were denied. Lij and Pat are left
with no options other than to sue for their right to work from home.

Lij ShawElijah “Lij” Shaw, a single father
and lifelong record producer, moved to Nashville in 1991. He has
recorded nationally renowned, Grammy Award-winning performers such as
John Oates, Jack White, Wilco, Adele, and the Zac Brown Band.
He’s been living in the same house in East Nashville since he bought it
in 2000. When his daughter Sarayah was born in 2005, he was inspired to
take charge of his work life and find a way to better support his
family. So he invested thousands of dollars to convert his detached
garage into The Toy Box Studio: a professionally soundproofed recording
studio where he could record his musician clients on his own property,
all while remaining close to Sarayah as she grew up.It was a perfect setup.
Well-respected musicians use The Toy Box Studio—the 2015 Grammy winner
for Best Roots Gospel Album was mixed there—and
Lij operated for 10 years without incident. His soundproofed studio
can’t be seen or heard from the street, and his clients park in his
driveway. None of his neighbors have ever complained to him about
traffic or noise.

But now Nashville is threatening to
destroy Lij’s investment and uproot him from his neighborhood. In
September 2015, Lij opened his mailbox to a letter from the Nashville
government ordering him to cease and desist the operation of his home
recording studio. A month later, an officer from the Nashville Codes
Department called and ordered him to shut down his business or be taken
to court. Lij was able to ward off an inspection by agreeing to take his
address down from his website, but the officer warned that if Codes
ever caught him recording in his studio—or even podcasting—he would be
taken to court and shut down.

Pat RaynorPat Raynor, a lifelong hairstylist,
became interested in working from home after her husband Harold passed
away in 2009. His 10-year battle with a debilitating medical condition
left Pat with extensive medical bills, exacerbated by the loss of
Harold’s income. Pat, who values hard work and cherishes her
independence, resolved to do whatever it took to stay in the home she
and Harold had bought together in 1999.

Pat still pays the mortgage and
property tax on that home. Those are fixed costs, and Pat must work in
order to afford them. But working comes with costs of its own. As a sole
proprietor, Pat pays both income tax and self-employment tax to the
federal government. She is 66 and must drive to and from work, which has
become moderately hazardous for her in the dark and sometimes icy
winter months. Renting a commercial hair salon costs $135 per week, no
matter how much she makes. She realized that she could eliminate the costs of commuting and renting by moving her business into her home.

Tennessee state law allows home
salons, and Pat invested over $10,000 to renovate her home and obtain a
Residential Shop license from the Tennessee State Board of Cosmetology.
She opened for business on April 24, 2013. Pat is friends with most of
her neighbors and counts many of them among her clients. It was easy for
those neighbors to get to her house, and because Pat only works by
appointment and didn’t put a sign out front, she wasn’t generating
traffic from curious walk-ins the way a downtown barbershop might have.
With no commercial rent and no commute, this arrangement was safe,
comfortable and affordable—a perfect way for Pat to keep working in her
“youthful old age.”

Alas, Pat’s home-based hair salon was
short-lived. On November 26, 2013, Nashville sent her a
cease-and-desist letter, ordering her to shut down her home-based
business. Pat called the city’s Codes Department—which wouldn’t tell her
who had complained—and learned that her state shop license was no
protection against Nashville’s client prohibition. She was told to clear
out her salon and schedule an inspection. After the city no-showed the
first two times it told Pat to have her home ready, it sent three agents
to verify that she was in compliance. They warned her never to cut hair
in her home studio again, or she would be taken to court.

Legal ClaimsResidential zoning laws are a
relatively modern creation. They restrict property rights by their very
nature, and the U.S. Supreme Court did not clear them as constitutional
until 1926.In Village of Euclid v. Ambler Realty Co.,
the Court held that municipal governments, if allowed under state law,
could exclude industrial uses from municipally-defined residential
zones. But whatever an industrial use may be, it’s clearly not Lij’s or
Pat’s quiet, by-appointment-only home studios. As originally authorized
by the Supreme Court, zoning laws were not meant to tell people how to
behave inside their homes.

Since 1926, however, zoning laws have
grown far more intrusive in scope. In 1974, the Supreme Court held that
a New York college town could use its residential zoning laws to
prohibit unrelated graduate students from signing a lease together as
housemates. Together with a
follow-up case holding that zoning laws could not be used to prohibit
grandparents from living with their grandchildren, the Belle Terre decision
remains the Supreme Court’s last statement on the constitutionality of
zoning laws. As a result, municipal governments today believe themselves
free to abuse the zoning power to regulate or prohibit almost anything
they want, even if doing so has no plausible connection to a legitimate
government interest like health or public safety.

That is what has happened in
Nashville. Lij and Pat are law-abiding citizens who have the
overwhelming support of their neighbors, no criminal record, and a safe
and unintrusive home-based business–far less intrusive than the many
home-based businesses the city allows. It’s unfair of Nashville to
single Lij and Pat out.

Furthermore, residential zoning laws
cannot be used to regulate a home-based business that can’t be seen or
heard from the street. Residential zoning laws are meant to maintain the
character of residential neighborhoods—not tell residents how to behave
inside their homes. The Tennessee Constitution, which affords greater
protection for substantive due process than its federal counterpart,
prohibits such an intrusive regulation of someone’s use of her own home.
The government could never prohibit Lij or Pat from having a friend
over for a visit. It doesn’t make sense that the government could
prohibit them from having customers over.

The Institute for Justice and the
Beacon Center have teamed up to affirm Lij and Pat’s right to work from
home. Their victory in court will expand legal protections for property
rights, recognize meaningful limits on the zoning power, and vindicate
the right of all Tennesseans to earn an honest living in their homes.

My Comment: I support the right of Lij Shaw and Pat Raynor to continue to earn a living by operating thir non-intrusive businesses out of their home. We all know of people who operate a business out of their home. Most do not get caught. When one routinely engages in activity that is technically illegal but the authorities just look the other way, that is not rule of law. That makes the authorities "the law" rather than the enforcer of law. I support the work of the Beacon Center in fighting for justice for people like Lij Shaw and Pat Raynor. To make a financial contribution to The Beacon Center, follow this link.

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As the author of A Disgruntled Republican I often post items which I think may be of interest to the conservative, Republican, libertarian or the greater community. Posting of a press release or an announcement of an event does not necessarily indicate an endorsement. Rod